Will driving the GXP in 3rd all the time damage anything?

All the time? Why would you do that?

It depends on how fast you're driving and for how long. I'm not too worried about the trans. Chances are you'll do more damage to the engine.

What are your rpms at... 70mph for example.

rpms at 70 are 3100 in 3rd. I just hate the constant shifiting in and out of 4th on the road. I barely floor the car so I knows its only dropping back into 3rd not 2nd so I figured limiting it from going to 4th for local trips should be fine. On a long highway trip I will use regular D. Gas milages on the computer was only about 1.5 to 2 mpg less on the highway and no change city

That'* not so bad. I'd say that doesn't hurt a thing. Like you said, it eliminates those wasted 3-4 and 4-3 shifts around town. I might try that, but I do very little town driving.

2100 at 70mph in 3rd sounds low... I'll check mine.

I always drive in what Pontiac calls third. If I come to a section of road where i am going to be above 55 for awhile, then I smoothly shift into 4th. in other GMs 3rd is listing as Drive and 4th listed as Overdrive. I think the practice of just putting the tranny in 4th leads to wear on tranny as it jumps back and forth constanlty in the Drive position. N* seem to thrive on high RPM but I wouldnt just leave it in 3rd, it is bound to wear engine in highway conditions.

Actually after driving todat it was 3000 in 3rd at 70 so I dont know.

Ya Shadow I havent really looked at the RPM in third, and when I do I'm fretting hitting the limiter while spraying. I thinks that running 3000Rpm extended will wear on the engine and build heat on hot days. I have read more than once that N* engines are never the same if they overheat enough to go into limp mode. . Slide that Baby into OD.